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Colombia Pharmaceuticals and Healthcare Report Q3 2008Published by: Business Monitor International Published: Sep. 16, 2008 - 63 Pages Table of Contents
AbstractBMI has updated its forecast for Colombia in line with its improved forecasting methodology and in linewith the broader strength of the Colombian economy and growing foreign direct investment (FDI).Colombia’s pharmaceutical market reached a value of US$2.36bn in 2007 and is now forecast by BMI toreach a value of US$6.14bn by 2012. This represents a 10.7% underlying average annual growth rate for2008- 2012 in US dollar terms, after accounting for forecast inflation.Colombia’s President Álvaro Uribe scored a series of major successes against the Revolutionary ArmedForces of Colombia (FARC) rebels, culminating in the rescue of Ingrid Betancourt and other high-profilehostages, following the deaths of several members of the group’s leadership and a leading fieldcommander. BMI remains cautious for now about security - FARC will seek to reassert itself throughviolent and high-profile actions - but if Uribe can solidify these security gains, the already attractiveenvironment for FDI will improve. Other question marks include whether Uribe will seek to change thelaw to seek a third term in 2010. Political stability has some way to go, but the upside potential for thewider business environment is immense. Colombia’s public-private healthcare insurance system remains under considerable strain despite thereform and semi-privatisation of the Institute for Social Security (ISS) in 2006. In May, the Colombiangovernment reportedly bailed out 15 health insurers with a COP226bn (US$120mn) payout, as researchshowed that costs had outstripped revenues for the insurers between 2005 and 2007. Reports also indicatethat the private sector insurers continue to seek to recruit healthier ISS members - namely those under 40- to improve their balance sheets. US pharmaceutical giant Pfizer has reportedly been among large US companies lobbying for theratification of the Free Trade Agreement (FTA) with Colombia, which the US Congress has yet to vote onafter nearly two years since its signing in 2006. With the both the presidency and control of Congress upfor grabs in November, it seems increasingly unlikely that US domestic political considerations will allowratification this year. The Colombian government had undertaken a number of commitments to improvingintellectual property (IP) and other rules under the FTA. But the next US president and Congress couldre-shape the deal - including watering down tougher IP provisions for the pharmaceutical industry. A lesswatched but also important pact, between the Andean Community and the EU, also remains stalled. Slow progress on the FTA should at least benefit local producers, giving them more time to solidify localmarket positions and enter new regional markets. In early July 2008, it was announced that localpharmaceutical producer Tecnoquímicas would sell 10% of its shares to the International FinanceCorporation (IFC) in exchange for around US$25mn to help the company expand regionally in Centraland South America. Local media also reported that Brazilian investment group GP Investments wasnegotiating a deal to invest up to US$150mn in local producer Lafrancol, although no deal was finalised. Get Full Details About This Report >> |
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